Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Equity crowdfunding provider welcomes financial market regs

Thursday 27 February

For Immediate Release

NZ equity crowdfunding provider welcomes new financial market regulations

The Directors of soon-to-launch equity crowdfunding provider Snowball Effect have welcomed Cabinet’s approved regulations for crowdfunding and peer-to-peer lending as part of the Government’s financial market overhaul.

In particular they have applauded the announcement that there will be no investor caps for equity crowdfunding, other than the previously announced $2 million cap that a company can raise through crowdfunding each year.

“We have held the strong view for a long time that caps are a blunt instrument for investor protection,” says Snowball Director, Simeon Burnett.

“We opposed the introduction of investor caps, because we believed that investors would easily be able to circumvent such controls by investing in foreign crowdfunding platforms, or investing through entities which do not reveal the ultimate owner. We also believe that individuals should be allowed to make their own decisions about their money.

“Clearly however, if equity crowdfunding is going to develop sustainably in New Zealand, there needs to be reasonable safeguards for investors so they are best placed to understand the risks and characteristics of the investments they are making.

“Investor protection in the regulations comes in many forms, including the requirement for share issuers to seek funds only through licensed providers, the requirement for the licensed providers to conduct background checks on issuers and directors, and the requirement to make investors aware of the inherent risks associated with investment via equity crowdfunding.”

Mr Burnett says extensive market research has shown that everyday investors and New Zealand and SMEs are struggling to connect, but want to do so.

“Our vision is a New Zealand economy fuelled by emerging businesses backed by everyday Kiwi investors,” he says.

“The country’s economic engine room is small to medium-sized enterprises (SME’s) and there are thousands of them with big vision who can’t take the next step on the growth ladder because the banks won’t lend, and other sources of capital don’t fit or are cost prohibitive. There are also thousands of New Zealanders with innovative ideas that can’t get them off the ground because raising start-up capital is typically limited to loans from friends and family.

“On the other side, tens of thousands of proud Kiwi investors or would-be investors would love to take a stake in one of the most dynamic sectors in the economy, but are currently unable to do so, particularly if they only have a small amount of money that they're willing to invest.”

Burnett says Snowball Effect will open the market up by connecting the two groups.

Snowball Effect is scheduled to launch in April once it is licensed by the FMA under the regulations.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Housing: Affordability Drops 14%, Driven By Auckland Prices

Housing affordability across New Zealand fell 14 percent in the year ending November 2014, with Auckland’s lack of affordability set to reach levels it hit during the height of the global financial crisis, according to the latest Massey University Home Affordability Report More>>

ALSO:

The Dry: Fonterra Drops Forecast Milk Volumes By 3.3 Percent

Fonterra Cooperative Group, the worlds largest dairy exporter, reduced its milk volume forecast for the 2014-2015 season by 3.3 per cent due to the impact of dry weather on production in recent weeks. More>>

ALSO:

Strike: Lyttelton Port Workers Vote To Escalate Dispute

Members of the Rail and Maritime Transport Union (RMTU) at Lyttelton Port today voted to escalate their industrial action. Around 200 RMTU members have been operating an overtime ban since 17 December and today they endorsed a series of full withdrawals of labour at the port. More>>

ALSO:

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news